This is a question I get asked a lot.
When funds are limited, patents can seem expensive in the short term. But they can, not only protect your market share and revenue, but also save you a fortune in tax.
The Patent Box tax scheme
I know I bang this drum quite frequently. But many still don’t know that having a UK patent for something means you can pay just10% Corporation Tax on all profits made from it. This is through the Government’s Patent Box tax scheme. Even if it’s a small widget in a larger product, the Corporation Tax reduction applies to all profits made from commercialising that product. Depending on what your margins and sales volumes look like, this could save you £thousands every year for up to 20 years.
Many of my clients have made this part of their IP strategy, as they have scaled up and expanded beyond their first product. They actively look for what could potentially be patented whenever a new product is developed. Even if that feature is not a particularly important element of the new product, they will often pursue patent protection. Just to take advantage of the tax saving.
Is a patent worthwhile for a small business?
For smaller companies or start-ups, initial patent costs can seem daunting. But, in the longer term, if your product is successful, it wouldn’t be long before the tax savings by far outweigh the initial cost of pursuing UK patent protection.
And that is quite aside from the other (more traditional) benefits of having patent protection. In other words, stopping your competitors from copying you and deterring others from muscling in on your market share.
Can we help?
Are you are developing a new product, or you are scaling up your business by expanding or diversifying your product line? We can help you find the features that could, ultimately, save you a fortune in tax.
For a fee initial chat, please visit our website at https://strachanip.co.uk/contact/
Or give us a call on 07714 797135.
Or, if you prefer, please email vicki.strachan@strachanip.co.uk or simply click the link below to schedule a mutually convenient time to chat.
https://calendly.com/strachan-ip-a-fresh-view-of-intellectual-property/30min